AIG Multinational Insurance Six considerations for a multinational insurance program.
What s at risk and which policy is right for you? As your business expands across time zones and borders, your opportunity for growth and prosperity increases as does your exposure to risk. How will you protect your company? What are your options? The opportunities? The potential obstacles? The reality is that there is more than one way to build an effective multinational insurance program. That s why at AIG Multinational we provide three uniquely different policy options. Whether it s local policies, a single global policy, or a Controlled Master Program, we will help you find a solution that fits your specific needs. However, the first step is to assess the risks you might encounter from every angle. Exposure evaluation Tax and capital Coverage Claims Compliance Proof of insurance 2
Six factors that will guide your decision-making process. Exposure evaluation Coverage Exposure evaluation The greater the exposures, the greater the need for local insurance protection What products/services do you provide? What type of physical presence do you have? What lines of insurance are you considering? What contractual counterparties do you have? Coverage A global policy for local risks Are there particular insurance terms and conditions that local operations need to be adequately protected? Are the necessary terms and conditions available only under a local policy? Compliance Compliance A multinational s regulatory and premium tax requirements Does local law require the local subsidiary to purchase and/or be covered by insurance from a locally licensed carrier? Does local law prohibit the local subsidiary from purchasing and/or being covered by insurance from a carrier not locally licensed? Will the parent company need to settle and pay premium tax in the local subsidiary s country? 3
Proof of insurance Claims Tax and capital Proof of insurance Satisfying local authorities Are local operations required to obtain insurance from locally licensed carriers? Does a contractual counterparty or government entity need to be shown evidence that coverage has been obtained locally? Will failure to provide evidence of locally obtained insurance breach contractual covenants or trigger any commercial, contractual or reputational consequences? Claims The need to respond locally Can the local subsidiary retain local counsel to defend a lawsuit? Will the subsidiary be able to retain loss control experts, engineers and medical providers to assist in the claim adjusting process? Will the subsidiary be able to retain investigators, search for beneficiaries or arrange for housing or other accommodations in the wake of a loss? Will the subsidiary be able to arrange for immediate medical treatment and evacuation? Corporate tax Tax liability and capital Will the claim need to be paid in-country? If the global policy cannot respond by paying the claim locally and must instead pay the parent company, will the parent company incur tax liability in its home country? Will the parent company need to make a capital contribution to the local subsidiary; if so, will the local subsidiary incur tax liability? Can the local operation survive if the parent company does not infuse capital to make it whole for a loss? 4
Moving forward. There is not just one right way to build a multinational program. Understanding local regulation is extremely important but should not be the sole factor you consider when designing a program. Continue to follow basic risk management principles; even though the exposures are foreign, the principles for addressing them remain the same. If the decision is not to purchase a local policy, all stakeholders should be well versed on the potential pitfalls and limitations. Leading the way. Around the world or around the corner. AIG Multinational is one of the world s leading insurance companies with a global network of underwriting and claims experts in over 400 worldwide offices. That s why we can back your multinational insurance program with licensed carriers in large commercial hubs like London, Paris, Tokyo, Hong Kong, Singapore and Sao Paulo. Moreover, in smaller regions like Papau New Guinea, Kenya and Qatar. Let us put over 80 years of multinational experience to work for you. Designing, implementing and servicing a global insurance program that fits your needs and takes into account your preferences. Are you ready to get started? To learn more, visit our AIG Multinational Resource Center or contact your broker. 5
American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange. Additional information about AIG can be found at www.aig.com YouTube: www.youtube.com/aig Twitter: @AIG_LatestNews LinkedIn: http://www.linkedin.com/company/aig AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.